Court Tells Nursing Home Company That Law Firm's Ads Targeting It Are Not A Form Of Trademark Infringement

Trademark

from the sorry,-but-not-liking-something-doesn't-make-it-infringement dept

Eugene Volokh of the Volokh Conspiracy points to a recent Georgia Supreme Court decision [PDF] that lets trademark holders know that just because some use of their trademark is less than complimentary doesn’t mean the use “tarnishes” the brand.

McHugh Fuller Law Group, using nursing home surveys published by the federal government, often seeks to gather litigants for class action suits against possibly-abusive nursing homes/employees. In this case, it decided PruittHealth-Moultrie’s survey responses warranted further litigation. It published an ad seeking “suffering loved ones” who might be interested in suing the nursing home — one that prominently used the nursing home’s logo and name.

Naturally, PruittHealth felt this use of its trademark to be disparaging, as it hinted that the company was mistreating its residents. It sued for damages, claiming the law firm’s use of its name and logo “diluted” the brand. But its argument had nothing to do with the normal sort of “dilution” often claimed in court. PruittHealth didn’t feel potential customers would be misled, but rather that its use in this form took the PruittHealth name down a notch or two.

At issue in this case is tarnishment, which OCGA § 10-1-451 (b) describes as “subsequent use by another of the same or any similar trademark, trade name, label, or form of advertisement” adopted and used by a person, association, or union “if there exists a likelihood of injury to business reputation … of the prior user, notwithstanding the absence of competition between the parties or of confusion as to the source of goods or services.” This theory of liability “has had some success when defendant has used plaintiff’s mark as a mark for clearly unwholesome or degrading goods or services.”

PruittHealth testified that it began receiving calls from concerned customers about the patients in its care as a result of the ad. McHugh Fuller testified that it had received 200 queries, resulting in 11 filed lawsuits — not necessarily a rebuttal of PruittHealth’s “likelihood of injury” claims.

The Supreme Court, reversing the state appeals court decision, points out that things that may result in damage to trademark holders are not always “tarnishing” under Georgia state law.

However, not every unwelcome use of one’s trademark in the advertising of another provides a basis for a tarnishment claim. See 6 Callman § 22:19. Tarnishment can occur “only if the defendant uses the designation as its own trademark for its own goods or services.”

[…]

Here, McHugh Fuller was advertising its legal services to individuals who suspect that their loved ones have been harmed by negligent or abusive nursing home services at a specific PruittHealth nursing home. The ad used PruittHealth’s marks in a descriptive manner to identify the specific PruittHealth facility; indeed, McHugh Fuller was counting on the public to identify PruittHealth-Moultrie by the PruittHealth marks used in the ad. The ad did not attempt to link PruittHealth’s marks directly to McHugh Fuller’s own goods or services. McHugh Fuller was advertising what it sells – legal services, which are neither unwholesome nor degrading – under its own trade name, service mark, and logo, each of which appears in the challenged ad. No one reading the ad reproduced above would think that McHugh Fuller was doing anything other than identifying a health care facility that the law firm was willing to sue over its treatment of patients. In short, the ad very clearly was an ad for a law firm and nothing more.

PruittHealth may not have liked what the advertising insinuated (and, indeed, fielded concerned phone calls because of the advertising) but that alone is not enough to bring claims of trademark tarnishment. Advertising is full of unfavorable insinuations and unflattering comparisons, and this law firm’s litigant fishing expedition is no different than ads claiming Corporation X’s service is less than spectacular while using Corporation X’s trademark in the ad copy.

Contrary to PruittHealth’s assertion in the trial court, trademark law does not impose a blanket prohibition on referencing a trademarked name in advertising. “Indeed, it is often virtually impossible to refer to a particular product for purposes of comparison, criticism, point of reference, or any other purpose without using the mark.”

PruittHealth’s idea of how trademark law should be enforced goes far beyond expanding Georgia’s trademark tarnishment law. It rubs right up against speech protected by the federal government.

Moreover, interpreting OCGA § 10-1- 451 (b) expansively to prohibit the use of PruittHealth’s marks to identify its facilities and services in any way, as the company urges, would raise profound First Amendment issues. […] “Much useful social and commercial discourse would be all but impossible if speakers were under threat of an infringement lawsuit every time they made reference to a person, company or product by using its trademark.” New Kids on the Block, 971 F2d at 307.

This isn’t one of the more egregious examples of using IP protections to shut people up that we’ve seen. But the end result of PruittHealth’s lawsuit — had the appeals court’s decision been allowed to stand — would have been indistinguishable from the more hamfisted bullying efforts detailed at Techdirt over the years.

Filed Under: class action, law firm, nursing home, trademark